Wednesday, 27 July 2016
Last updated 11 hours ago
Nov 30 2012 | 8:43am ET
A former hedge fund executive acquitted of fraud charges is too late to recover about a half-million dollars in legal fees, a federal judge ruled.
Martin Garvey, accused of defrauding Lancer Group investors of more than $200 million last year, is stuck with the legal bill for his freedom, U.S. District Judge Kenneth Marra said. Garvey missed a deadline established by the Lancer receiver for preliminary claims.
"Garvey had failed to file a contingent proof of claim by the claims deadlines even though he knew before the claims bar date that he would incur legal fees," Marra ruled. "The claimants whom the district court has already determined to have allowable claims and who have already received distribution of assets, would be prejudiced if Garvey's untimely claim were allowed at this late stage."
Marra also rejected Garvey's claim to have been indemnified by Lancer's operating license. The judge said that the indemnity covered only Lancer manager Michael Lauer, who was acquitted alongside Garvey, who was a co-owner of the hedge fund.